Almost 75% of Florida Banks Now Eke Out a Profit

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NEW YORK (TheStreet) -- Nearly three out of four Florida's banks were profitable during the first quarter, which was a vast improvement from the fourth quarter, when nearly half lost money.

Of course, Florida still has its share of troubled banks, with 24 undercapitalized institutions as of March 31, according to data provided by Thomson Reuters Bank Insight, not including Security Bank, NA of North Lauderdale, which failed on May 4, and was purchased from the Federal Deposit Insurance Corp. by Branesco USA of Coral Gables, Fla.

Please see TheStreet's Bank Watch List for a full listing of all the banks and thrifts across the country that were undercapitalized, per normal regulatory guidelines, as of March 31.

One of the larger banks on last quarter's Bank Watch List was Vision Bank of Panama City, which was held by Park National Corp. of Newark, Ohio. Park National sold Vision Bank to Home BancShares of Conway, Ark., for $27.9 million on February 16. The deal was a sweet one for Home BancShares, which picked up 17 branches in Baldwin County, Ala., and in the Florida Panhandle, while not acquiring Vision Bank's nonperforming loans or its repossessed real estate.

Deposit gathering in Florida is dominated by the big national players, including Bank of America , with a first-place 19% deposit market share as of June 30, 2011, according to the most recent FDIC data. Wells Fargo is in second place, with a 16% deposit market share in the Sunshine State, followed by SunTrust , with a 10% market share.

But smaller players are looking for continued Florida expansion. Home BancShares chairman John Allison said during the company's first-quarter earnings call that "we're looking somewhere in the Naples market to try to build some more base there for our Keys operation," and that the company "would like to do something in and around Orlando, and we would certainly continue to build in the Panhandle." During the call, Home BancShares chief lending officer Kevin Hester said "we're optimistic, especially in Florida," where the bank's loan "pipeline is improving."

Since the Bank Watch List is based solely on capital ratios, we take a different approach on our quarterly coverage of banks in key states, by looking at overall credit quality to identify troubled institutions.

Florida Banks with Weakest Asset Quality

The following list includes all banks in the state with nonperforming assets comprising more than 15% of total assets as of March 31:

Nonperforming assets (NPA) include nonaccrual loans, loans past due 90 days or more and repossessed assets. Government-guaranteed loan balances are excluded. The ratio of net charge-offs to average loans is annualized.

The total risk-based capital ratios needs to be at least 8% for most institutions to be considered adequately capitalized by regulators and 10% for most to be considered well-capitalized. Most of the undercapitalized banks on the above list are operating under regulatory orders to achieve and maintain total risk-based capital ratios higher than 10%.

The list also includes financial strength ratings provided by Weiss Ratings. Weiss Ratings uses a very conservative ratings model, placing the greatest weight on capital strength, credit quality and earnings stability to assign ratings ranging from A-plus (Excellent) to E-minus (Very Weak).

Largest Florida Banks

As we have seen from the expansion of Home Bancshares and the comments from the company's executives, Florida remains a key banking battleground and a long-term growth story. Over time, the state's economic advantages -- including lower (or nonexistent) heating bills, lower real estate prices than many northern states, lower property taxes, and the lack of a state income tax -- not to mention all that sunshine, seem likely to restore the state's destination status for an aging U.S. population.

Here are the 10 largest banks headquartered in Florida along with key metrics as of March 31:

The largest Florida bank is Everbank of Jacksonville, which had $13.8 billion in total assets as of March 31, and operates mainly over the Internet. Everbank is the main subsidiary of Everbank Financial , which went public on May 3, with an offering of 22,103,000 common shares, at an initial price of $10.00 a share. The shares closed at $11.27 on Tuesday.

The second largest Florida institution is BankUnited of Miami Lakes, which is held by BankUnited, Inc. . The "new" BankUnited was formed was formed by an investor group led by John Kanas to acquire the old BankUnited FSB from the FDIC after the thrift failed in May 2009.

The investor group took the thrift public in January 2011. The holding company on Feb. 29 completed its $71 million acquisition of Herald National Bank of New York, which will continue to operate as an independent unit, until being merged into BankUnited at the end of August

BankAtlantic Bancorp has a deal in place to sell BankAtlantic of Fort Lauderdale to BB&T for what BB&T said was "an estimated premium of $301 million above the net asset value of BankAtlantic at closing," representing "a 9% deposit premium based on September 30, 2011 balances," or an estimated $301 million.

Strongest Florida Banks and Thrifts

Based on fourth-quarter financial reports, only two Florida institutions were assigned "recommended" ratings of B-plus or above by Weiss Ratings:

Thorough Bank Failure Coverage

There have been only three bank failures in Florida this year, following 13 closures in 2011, 29 in 2010, and 14 in 2009.

Since the current wave of bank and thrift closures began in 2008, Florida has had 61 institutions shuttered by regulators, trailing only Georgia, which has seen 78 institutions fail, and leading Illinois, with 50 failures, and California, which has had 39 bank and thrift failures since the beginning of 2008.

There were two bank failures on Friday.

All previous U.S. bank and thrift closures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map:

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark gray, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2011 totals. Then click the state to open a detailed map pinpointing the locations and providing additional information for each bank failure.

-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

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